UNITED NATIONS
ECONOMIC AND SOCIAL COUNCIL
m
Distr. LIMITED
ECA/TPTCOM/EXP/97/2(vii) October 1997
Original: ENGLISH
ECONOMIC COMMISSION FOR AFRICA
Meeting of Experts Preparatory to the Eleventh Conference of African Ministers of Transport and Communications
22-24 November 1997 Cairo, Egypt
VOLUME VII
EXPERIENCES OF COUNTRIES SECOND MID-TERM EVALUATION
OF UNTACDA II
EXPERIENCES OF COUNTRIES
1. In order to ensure wider dissemination of the efforts made by States to develop the transport and communications sector, ECA selected, at the subregional level, some countries which were requested to send in reports of their experiences. At the time of writing this evaluation ECA has only received replies from the countries named below. Countries should strive to send in their information in time. Furthermore, ECA plans to involve subregional organizations and use more of countries to collect and disseminate various experiences.
2. In this chapter which aims to highlight the experiences of some States in the area of transport sector development policy, the cases of three countries will be addressed: South Africa for the Road and road transport subsector, and Burkina Faso and Tanzania for the entire transport sector.
South Africa
3. South Africa's transport system is meant to (i) provide fully integrated, effective, efficient, reliable and dependable transport services and (ii) a sustainable environmental and economic infrastructure which as much as possible meets the freight as well as passenger needs in terms of the quality of services and improved costs compatible with the government's economic and social development strategies. Thus, the road transport authority task is (i) to maintain, improve and develop the national road network in such a way as to facilitate development of all the country's transport modes; (ii) to implement its programmes so as to enhance the sustainability of the network; and (iii) to inspire an innovative and effective research and development.
4. Implementation of the policies defined above requires a road Agency which operates on commercial principles while remaining under the Government who allocates to the sector road resources which are spent to maintain sound services to road users.
5. With regard to road investment financing, two methods are currently being supported by the Government to make up for insufficient budgetary resources. The first is known as "BOT"
(Build, operate, transfer), the second is "FROM" (finance, rehabilitate, operate and maintain).
They are both based on the principle of using private capital to finance the design, construction and maintenance of roads for a given period during which the private investor establishes a toll on the road concerned in order to generate resources to repay any loan involved as well to recover the initial sum invested. The Government reserves the right to demand a minimum degree of service during the maintenance period of 20 years, after which the road becomes government property.
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6. In order to share the Decade's main objective which is regional cooperation and coordination, South Africa cooperates with its neighbours through such forums as the Technical Unit of the Southern Africa Development Community (SADC).
7. In implementing its policy, South Africa encountered four difficulties which led it to adopt interactive approaches these are:
(a) Financial constraints: The road transport authorities have been under pressure to reduce their budgetary allocations. This was what led them operate the "BOT" and "FROM"
methods as an alternative to the conventional methods of road project financing;
(b) The economic cost of construction and maintenance investments; owing to the non-economic costs of executing projects under State control, new constructions had to be entrusted to the private sector. Furthermore, road maintenance is now done by private companies through invitation to tender;
(c) Sustainability of social development: In the past, little interest was shown in the secondary social consequences which road construction could have on riparian communities. At present, road transport authorities have realised that in order to derive the greatest possible benefit from road development they must stimulate socio-economic growth in their areas of
influence.
(d) Improving the skills of young consultants and entrepreneurs: in order to reduce the social inequalities resulting from the 1994 pre-election period, the road authorities embarked on a programme of assistance to young consultants and entrepreneurs by granting them access to the market and to contracts, and by enabling them to acquire experience with renowned companies (through specific or permanent associations) in order to increase the competence of all those concerned.
8. Thus, it happened that although South Africa did not participate in drawing up the objectives, strategies and programmes of the Second Decade, its road and road transport objectives are in conformity with those of the Decade, especially as regards inter-State links and the social impact of road investments.
Burkina Faso
9. The geographical situation of Burkina Faso makes for special interest in the transport sector and spurs the diversification of transport networks and modes. In fact, it is a land-locked country, to which the nearest sea port is 1000 km from its capital Ouagadougou. Then, given its central position in UEMOA, it is at the crossroads, indeed is a hub for land traffic from northern Mali and western Niger towards the ports of Lome (Togo), Tema (Ghana) and Abidjan (Cote d'lvoire). According to 1992 statistics and on the basis of 1985 prices, the transport,
warehousing and communications sectors of activity accounted for 5 per cent of its GDP. The informal accounts for 10 per cent of this sector's activities and contributes 15 per cent of its value-added.
10. Under the structural adjustment launched in 1990, and given the importance of the transport sector the Government of Burkina Faso adopted a general policy on the road transport sector, defining the objectives of a transport sectoral adjustment programme (PASEC-T). The programme's establishment was based on the following principles: (i) giving priority to road maintenance and infrastructure rehabilitation; and (ii) giving special importance to management and the establishment of sound financial structures; and (iii) efforts are being made to systematically develop knowledge of the statistics.
11. The implementation of PASEC-T was supported by 14 donors. The programme had two main components: the first of which concerns investment while the second concerns support to institutional adjustment. The "investment" component is made up of five sub-components: roads, road transport Industries, the railways, Civil Aviation and the transport Administration. The programme's implementation planned for five years (1992-1996) was extended to 31 December 1998. Estimated at the equivalent of $US 682 in 1991, the total cost was readjusted, in December 1996, to the equivalent of $US 772 million and the total funding was confirmed. The major mid-term results of PASEC-T can be summarized as follows:
• Construction of 369 km of tarred roads, of which 148 km extends to the border with Benin Republic;
• Rehabilitation of 154 km of tarred road, of which 150 km extends to the border with Togo;
• Construction of 899 km of earth roads;
• Improvement of road maintenance work; more than 8909 km of road were maintained in 1992 with the number increasing to 9181 km in 1996; the total length of road currently maintained whose cost increased from the equivalent of $US 6,000,000 to the equivalent of 9,000,000 in 1997, is the
responsibility of the Burkinabe Government;
• Privatization of current maintenance works: the percentage of road maintained by the Government was brought down from 27 per cent in 1993 to 14 per cent in 1996 while that entrusted to companies increased from 72 per cent to 86 per cent, and led to the creation of 27 small- and medium-scale enterprises;
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• Reorganization of the General Directorate of public works led to 60 per cent reduction of staff;
• Modernization of the transport administration: the restructuring of public sector enterprises gave Air Burkina as against its huge deficit very positive performance in 1995, after three financial years;
• Training of 71 administrative staff and 10 persons for 42 enterprises as well as field follow-up training for 31 companies
12. Finally, it happened that the operations of PASEC-T aimed mainly to later turn the transport sector, which, in general terms, is currently being subsidized, into an income- generating project for the State through:
(a) Improved use of investments already made if economically justified;
(b) Rethinking the method of operation of the administration/private sector.
(c) Undertaking better studies and activity planning based on broad and in- depth knowledge of the transport sector statistics
13. Under the Decade programme, 14 projects were approved for Burkina Faso, 7 for the road and road transport subsector and 7 for the Railway sector. The current situation of these projects is as follows; five have been funded are being executed, nine are in the fund mobilization stage. Two of the 14 are PASEC-T projects and have been allocated funds.
14. It thus happened that in spite of the success achieved in the financing of the PASEC-T programme, the financing of the Decade projects initiated in Burkina Faso remains poor (less than 36 per cent), that is, less than the average financing rate of all the Decade transport sector.
This shows, at the outset, that the projects presented by Burkina Faso for inclusion in the Decade programme were not among the top priority transport sector projects because with the exception of the two approved by PASEC-T, which on the basis of the general policy of the Burkinabe Government, can only accommodate projects recognized as priorities for general improvement of the sector.
15. Another visible lesson from the experience of Burkina Faso is that: the country mobilized total funds equal to $US 772 million, of which more than $US 674 or 83.3 per cent from external sources for the funding of a programme launched almost at the same time as the Decade's. Thus, this country succeeded in mobilizing for its programme, more than 30 per cent of the funds mobilised for the entire Decade programme in seven years, bearing in mind the fact that at the outset the Decade had about $US 1,700 worth of resources obtained or guaranteed.
16. Finally, the situation confirms the importance given by the international financial community where necessary to the adoption and application of sectoral policy reforms as a prerequisite for investments.
17. Tanzania is a coastal country, whose strategic location puts it in a position to provide transit services to four land-locked countries, namely, Zambia, Rwanda, Burundi, Uganda and the eastern part of the Democratic Republic of the Congo. Also, the transport and communications sectors play a crucial role, particularly as regards export facilitation and foreign currency earning from transit traffic. From 1990 to 1991, while its GDP grew at an average of 3 per cent, the transport sector grew at an average of about 8 per cent. This remarkable contribution is the result of the emphasis given to reconstruction and rehabilitation of the major transport infrastructure aimed at providing cheap services to the other sectors of the economy.
18. In the early 1980s, the objectives and strategies of Tanzania's macro-economic policy were being implemented through national economic policies including the structural adjustment programme which ended in 1985, and through an economic recovery programme from 1986 to 1987. These programmes had limited success owing to the inadequacies both in the economy and in the social services infrastructure.
19. Acknowledging the crucial role of the transport sector, the Government launched a transport sector recovery programme in 1981 in order to reactivate the subsector so as to facilitate the development of the other sectors of the economy. There appeared to be a need to pay serious attention to the country's policies and strategies. This situation led to the preparation of subsequent programmes such as: the integrated road policy (IRP), the Tazara commercialization project (TCP) and the port modernization project (PMP) all of which emphasized the need to reform policies and institutions alongside investment decisions. Also, at the time UNTACDA II was launched, in 1991, the Tanzanian transport sector was more busy implementing policy reforms.
20. Since then, the Government adopted the following key policies: (i) Giving priority to road rehabilitation and maintenance with an increased budgetary allocation aimed at improving the condition of major roads and earth roads in up to 10-70 per cent of the total road network;
(ii) adoption of the IGR; (iii) securing maximum private sector involvement in the operation of transport services; (iv) Commercialization and privatization through plans to allow railway, port and airport operations.
21. The problems encountered in implementing the policy reforms concerned: (i) change of interest by donors and availability of financial resources; and (ii) ability of the Departments of the Ministry of public works to conduct surveys and carry out works.
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22. Within the framework of the Decade, there were only three projects for Tanzania.
The two approved with effect from 1991, namely: rehabilitation and improvement of the Mtwara-Song6-Moamba-Bay (160 km) and (ii) rehabilitation and improvement of the Tanzam road (925 km), which were allocated a total financing of $US 195.10 million, of which $US 141. 80 million were external resources, are under execution. Request for financing for the third project introduced in 1993 at the request of the Kagera Basin Authority for the construction of the Lusahunga-Biharamulo-Kemondo-Bay-Bukoba-Mutukula road went to ADB. With funding
already provided for two out of three projects it can be said that the performance was absolutely satisfactory. These three projects are quite in line with the Decade objectives as these are roads linking up land-locked countries to the sea; the last is a road linking up Uganda; it is meant to be partially funded from a loan from the African Development Fund (ADF) in 1997 for the equivalent of $US 31 million.
7.2 Communications Sector
23. The achievements and performance of a few countries in the communications sector are reviewed as example in attaining the global and sectoral objectives of the Decade programme.
The review would be made by taking as examples for telecommunications Uganda and Tanzania, for broadcasting Ethiopia and for postal services Kenya and Egypt.
Uganda
24. In accordance with its macro policy of liberalizing the economy, Uganda has already involved the private sector in developing telecommunications. The monopoly in the provision of terminal facilities and some telecommunication services has been remove. One private company has been licensed to provide mobile services and another company to provide a wide range of satellite communication services to business customers.
25. The involvement of the private sector and the firm plans of the Government to privatize telecommunications and introduce a second national telecommunications operator are all in line with the Decade sub-sectoral objective of "institutional restructuring for improving operational and commercial efficiency".
26. One of the eight projects initiated by Uganda in the Decade has been fully funded and implementation is on-going. The completion of the project would be in line With the Decade sub- sectoral objective of telecommunications equipment and "maintenance, rehabilitation and modernization of existing infrastructural facilities". The reforms and the involvement of the private sector speeds up telecommunications development which in turn supports of national economic development.
Tanzania
27. In line with the Government's policy of faster development and improved efficiency in the sectors, the structural re-organization resulting in the separation of telecommunication and postal services was completed in early 1994. Two private companies have been licensed to operate mobile and cellular services.
28. A major activity that is being undertaken pertaining to the objectives of the Decade is the Telecommunication Rehabilitation Programme (TRP). The programme aims at consolidating maintenance and rehabilitation and raising capacity utilization of existing equipment. The programme is also targeted at providing telephone service to all district headquarters and to all boarder towns. The success achieved by Tanzania in the telecommunications sector is partly due to the establishment of an independent regulatory body, an experience to be drawn on by other countries.
29. Two projects initiated by Tanzania in the Decade have been fully implemented and this meets the subsectoral objectives of the Decade on modernization of existing telecommunication facilities and extension of services to rural areas. The announcement in July 1995 of an invitation for provision of basic services in remote rural areas by private operators is a good example of attainment of the Decade subsectoral objective of serving the rural areas by employing private sector participation.
Ethiopia
30. On the basis of Ethiopia's policy of equitable service to the regional states, effort is under way to provide radio and television services to a number of towns by installing medium-wave radio transmitters and satellite-relayed TV rebroadcasting systems using the DOMSAT system.
There is also interest in the World-Space scheme of direct satellite sound broadcasting for total national radio service coverage.
31. The radio and TV departments under the Information Ministry have been corporatized to give them autonomy of management and to prepare them for the up coming competition in the sector. A draft legislature on establishment and operation of private radio and TV services is under preparation for presentation to the Council of Representatives. The steps being taken by Ethiopia serve as a good example of attaining the Decade's target of total broadcasting coverage of the national territory.
32. As part of the restructuring scheme that is on-going in the postal sector, the postal administration has for sometime been in the process of separating itself from telecommunications. All the postal structures have been restructured to facilitate effective
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yresponse to competition, and to enable development of new services and good quality of service. The new administration established, sets its own competitive tariff rates without government approval. Several measures aimed at improving quality of training and the qualifications of staff are being undertaken in response to the strategy of commercializing the existing services in the post offices. The above activities, in large measure, respond to the Decade programme objectives in the postal subsector.
Egypt
33. The postal administration has been autonomous for many years. In response to the Decade's objective of introduction of new services, the administration has introduced new postal products namely, electronic mail service, electronic mail boxes, cassette post, track and trace for EMS, computerized financial counter services and savings bank. Egypt's efforts in this area in line with the Decade objective and is exemplary.
